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What’s in Store for PNC Financial (PNC) in Q3 Earnings?

Zacks

The PNC Financial Services Group, Inc. PNC is scheduled to report third-quarter 2017 results on Oct 13, before the opening bell. Its revenues and earnings are projected to grow year over year.

Before we discuss why an earnings beat might also be in store and what could influence the results, let’s take a look at how the company performed in the prior quarter.

PNC Financial’s second-quarter 2017 results improved primarily due to growth in loan balances and decline in provision for loan losses. These factors also helped it in surpassing the Zacks Consensus Estimate. However, the positives were partially offset by higher expenses.

The earnings beat translated into improved price performance. Over the last three months, shares of PNC Financial have gained 7.5% compared with 3.4% growth recorded by the industry.

Notably, PNC Financial delivered positive earnings surprises in each of the trailing four quarters, with an impressive average beat of 5.1%.

PNC Financial Services Group, Inc. (The) Price and EPS Surprise


PNC Financial Services Group, Inc. (The) Price and EPS Surprise | PNC Financial Services Group, Inc. (The) Quote

Will the upcoming earnings release give a boost to PNC Financial’s stock? This depends largely on whether the firm is able to deliver a positive earnings surprise.

Here’s what our quantitative model predicts:

According to our quantitative model, chances of PNC Financial beating the Zacks Consensus Estimate in the to-be-reported quarter are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which is required to be confident of an earnings surprise call.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The Earnings ESP for PNC Financial is +0.07%.

Zacks Rank: PNC Financial currently carries a Zacks Rank #2 (Buy), which when combined with a positive ESP, increases the chances of an earnings beat.

Nonetheless, the estimates have remained stable over the past 30 days. The Zacks Consensus Estimate of $2.13 per share for the third quarter reflects growth of 15.3% year over year.

Factors to Influence Q3 Results

Net Interest Income to Grow: In addition to higher interest rates, moderate improvement in lending — particularly, in the areas of commercial and industrial as well as consumer — might perk up interest income.

Management expects its net interest income for the to-be-reported quarter to increase in low-single digits while fee income is expected to remain stable.

Expenses to Remain Stable: The company anticipates its non-interest expenses to remain stable in the third quarter.

Provision for Loan Losses: The company expects the provisions to be in the range of $75-$125 million in the to-be-reported quarter. Provision for loan losses in the year-ago quarter was $87 million.

Stocks to Consider

Here are some stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.

Comerica Incorporated CMA has an Earnings ESP of +0.68% and a Zacks Rank #3. It is slated to report second-quarter results on Oct 17. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

M&T Bank Corp.’s MTB Earnings ESP is +0.80% and it carries a Zacks Rank #3. The company is expected to release second-quarter results on Oct 18.

SunTrust Banks, Inc. STI has an Earnings ESP of +0.09% and a Zacks Rank #3. It is scheduled to report second-quarter results on Oct 20.

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